In order to compete with Google, Microsoft decided to return consumers a portion of their purchases if they buy goods through its Live Search cashback program.
“I think years from now, you may look back and say, ‘Wow, search started to get a fair bit more competitive, and we can look back to that announcement.’ We think what we’ve got is super-neat here, but we can see taking this in some new directions.” Microsoft’s Bill Gates told the crowd.
For consumers, the program is getting attention for its promise to refund a portion of the purchase price on items they buy via Live Search. But for advertisers, the most intriguing bit is Live Search cashback’s use of a cost-per-acquisition model, which allows them to pay for the ad only when a consumer makes a purchase as a result of an ad, as opposed to the standard model that requires them to pay when someone clicks on an ad.
After consumers click through to a merchant’s site and buy an eligible product, the designated discount will be paid into an online account where the refunds will accumulate and be available via direct deposit to a bank or PayPal account, or by check.
Cashback programs have been tried by smaller search engines, with mixed results. Because of Microsoft’s big online presence, its new initiative could get lots of attention in the industry and among consumers.
Source: Seattlepi.com
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